0 Assume the betas for securities A, B, and are as shown here: M a. Calculate the change in return for each security if the market experiences an increase in its rate of return of 12.9% over the next period, b. Calculate the change in return for each security if the market experiences a decrease in its rate of return of 10.8% over the next period c. Rank and discuss the relative risk of each security on the basis of your findings Which security might perform best during an economic downtum? Explain Security C's change in retum will be % (Round to two decimal places) b. Calculate the change in return for each security if the market experiences a decrease in its rate of return of 10.8% over the next period. Security A's change in return will be % (Round to two decimal places) Security B's change in return wil bo % (Round to two decimal places.) Security C's change in return will be % (Round to two decimal places) c. Rank and discuss the relative risk of each security on the basis of your findings. Which security might perform best during an economic downturn? Explain. (Selec the best choice below) O A. Security A is the most risky. It has the highest relevant risk, as determined by the beta values and the greater changes in security A's return for a given change in the market retum. OB. Security is the least risky since its retum is least responsive regardless of direction) to changes in the market return Oc. Security C could be called defensive since it moves in the opposite direction from the market (its return increased when the market retum fell and vice versa). OD. During an economic downturn, it can probably be assumed that the market return would decrease. If this occurred, security C would perform best. Otherwise, security B would be best since it would be least responsive to a change in the market return. O E. All the above statements are correct. i Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Beta Security . B le 1.44 0.82 -0.94 m ly m Print Done